How do I create the project outside the /var/www/ directory?

I would use an Alias:

Alias /hello-world /home/www/foo
<Directory "/home/www/foo">
    Options -MultiViews -FollowSymLinks +SymLinksIfOwnerMatch
    AllowOverride all
</Directory>

Enable FollowSymlinks in your Apache-config and make a symbolic link on your file system.

ln -s /path/to/your/project /var/www/projectname

And replacing the content is easy, without having to reload the server

rm /var/www/projectname
ln -s /path/to/your/project-v2 /var/www/projectname